Many individuals and institutions use checks as a medium for monetary payment or for transferring monies to another party. Typically, an individual or institution opens a checking account with a financial institution. The financial institution provides the ability to write checks against monetary finds held in the checking account. When an individual or institution writes a check for a specified amount to another party, the party must then “cash” the check with the financial institution to obtain the specified amount on the check held by the financial institution in the individual or institution's checking account.
There may be some risks involved with check-cashing transactions. In some instances, a check-cashing transaction can involve fraud. For example, a person can fraudulently misrepresent their own identity as one authorized to cash a particular check. If the check is written by an unauthorized person for a specified amount and cashed by the financial institution, the monetary funds held in the checking account may be wrongfully taken by the unauthorized person. Thus, a need exists for systems and methods for authenticating a person's identity in a check-cashing transaction.
In another instance, a person can fraudulently create a check and attempt to cash the fraudulent check. Again, monetary funds held in a checking account may be wrongfully taken by the person using the fraudulent check. Thus, a need exists for systems and methods for authenticating a check in a check-cashing transaction.
Finally, a financial institution or another third party involved in check-cashing transactions is exposed to financial or legal risk during these types of transactions. These risks may impose additional financial or legal burdens on the institution or third party. Thus, a need exists for systems and methods for assessing associated risks involved in a check-cashing transaction.
As described above, there are numerous risks involved in each step of a check-cashing transaction. These risks may impose additional financial or legal burdens on the institution or third party involved in the check-cashing transaction. Therefore, a need exists for systems and methods for authenticating a check-cashing transaction and assessing associated risks.